Write Down your Mileage

published January, 2008

Go out to your car(s) and write down the mileage from the odometer. 

Do it now. 

E-mail it to me with a list of your cars, or put it in your tax folder for 2007, then make a copy for 2008’s tax folder.

Every year we need to take some statistics on your vehicles used for business. We can only deduct miles used for business, but we need to know what the TOTAL mileage is for the year.

In the world of automobile expenses, if you’re splitting expenses between personal and business use, there are two ways of calculating the business portion: Actual Expenses or Standard Mileage. One is a replacement for the other, and the first year, you get to choose which method results in a greater deduction, or less tax.

In either case, we need to know total mileage AND business mileage for the year. In the ideal world, you’ll have a contemporaneously made mileage log showing where you visited and what the business purpose was.

You can’t deduct commuting expenses, which are your trip to work each day, even if you drive directly to a client’s office. Of course, if you have a home office, you’re already at work, so mileage to clients is deductible.

For more information, see my video on the web at http://video.google.com/videoplay?docid=-1937414199395261416&q=tax+buddha&total=17&start=0&num=10&so=0&type=search&plindex=0.